The End of an Era? EEOC Votes to Scrap 60-Year-Old Workforce Demographic Reporting Requirements

On July 21, the U.S. Equal Employment Opportunity Commission voted to approve a Draft Notice of Proposed Rulemaking that would rescind the EEO-1 report and related demographic data reporting requirements — ending an obligation that has been a fixture of federal employment compliance for six decades. While the proposal must still navigate the notice-and-comment process before becoming final, the Commission’s vote marks a decisive step toward eliminating one of employers’ longest-standing federal reporting obligations. Employers and employment counsel should understand what this means (and what it does not mean) for their compliance posture going forward.

Background: What Is the EEO-1 Report and Why Did It Exist?

Since 1966, the EEOC has required private-sector employers with 100 or more employees, as well as federal contractors with 50 or more employees meeting certain criteria, to submit an annual form known as the EEO-1. The report requires employers to categorize their workforce by job category, race, ethnicity, and sex, providing a demographic snapshot of their employment composition. Related reports, such as the EEO-2 through EEO-5, impose similar requirements on apprenticeship programs, unions, state and local governments, and public school systems. 

The EEOC's authority to collect this data derives from Section 709(c) of Title VII of the Civil Rights Act of 1964, which requires covered employers to make and keep records relevant to determining whether discrimination has occurred and to submit reports as the EEOC requires by regulation. The goal was that the demographic data would enable the EEOC to identify disparities across industries and job categories, guide its investigations, contextualize discrimination complaints, and analyze workforce composition trends on a national, regional, and industry-specific basis. 

While the EEOC is prohibited from publicly releasing any individual company’s EEO-1 form, the agency can publish the data in aggregate. Nevertheless, in recent years a growing number of major companies began voluntarily disclosing their EEO-1 forms in response to shareholder pressure and calls for workforce transparency. 

The EEOC's Decision: What Was Proposed and What Happens Next

On May 14, the EEOC submitted a proposed rule to the White House Office of Management and Budget (OMB) proposing to rescind these reporting requirements. After OMB review, the EEOC scheduled an open Commission meeting on July 21 to discuss and vote on the proposed rule. 

EEOC Chair Lucas argued that requiring companies to submit annual demographic reports “risks encouraging companies to justify discriminatory practices to diversify their workforce,” stating that the categories in the EEO-1 forms “don't reflect the modern workforce” and that the requirements impose “significant financial and administrative burdens on the nation’s employers.” Lucas emphasized that the EEOC would continue to demand data in the course of its individual investigations. 
Commissioner Kalpana Kotagal sharply dissented, stating that the proposal would “kneecap [the EEOC’s] ability to investigate discrimination, particularly at a time when the EEOC is chronically understaffed and underfunded.” She also warned employers that under future leadership, the EEOC could reinstitute EEO-1 collection. 

By a vote of 2-1, the Commission approved the proposed rule largely along party lines and officially released the proposal on July 21. 

The proposal will now proceed through the notice-and-comment rulemaking process. Commissioner Kotagal introduced a motion at the Commission’s meeting to extend the comment period from 30 days to 60 days to allow more public discourse, but the motion did not pass. Stakeholders have until Aug. 11 to submit public comments through www.regulations.gov. 

Only after comments are considered and a final rule is issued would the reporting obligation formally cease. 

State-Specific Implications: The Federal Rollback Does Not End All Reporting

Even if the federal EEO-1 requirement is eliminated, employers operating in multiple states should not assume their demographic reporting obligations have disappeared. Several states have enacted independent workforce data and pay reporting requirements that remain fully in effect regardless of the EEOC's action.

California

California’s pay data reporting requires private employers with 100 or more employees (including at least one in California) to submit annual pay data reports to the California Civil Rights Department. These reports go significantly beyond the federal EEO-1 by requiring disclosure of pay band information and hours worked data, broken down by establishment, job category, race/ethnicity, and sex. 

Effective Jan. 1, 2026, California further tightened its pay data reporting requirements: employers and labor contractors must now store demographic data collected for these reports separately from personnel records, and penalties for failure to file are now mandatory — $100 per employee for an initial violation and $200 per employee for subsequent violations. California’s requirements are entirely independent of the federal EEO-1 and will continue unaffected by the EEOC's proposed rescission.

Minnesota

Minnesota’s reporting framework operates differently from California’s but still imposes meaningful obligations. The state requires government contractors and public subdivisions with 40 or more employees to obtain both a Workforce Certificate and an Equal Pay Certificate, which require submission of demographic workforce data, pay data by gender, race, and ethnicity, and affirmative action plans with workforce analyses. Additionally, Minnesota’s Local Government Pay Equity Act requires all public jurisdictions to eliminate gender-based wage inequities and submit reports to the Minnesota Management and Budget Office. Minnesota’s pay transparency law, effective Jan. 1, 2025, also requires employers with 30 or more employees to disclose salary ranges and benefits in job postings, although this operates as a posting requirement rather than a government reporting obligation.

Illinois

Illinois requires companies with 100 or more employees to file an EEO-1 to submit demographic and compensation data under the Illinois Equal Pay Act. In addition to this demographic information, these employers must also submit an Equal Pay Compliance Statement.

Other States

California, Minnesota, and Illinois are not alone, with other states and municipalities requiring some form of employee demographic reporting, such as Massachusetts, New Jersey, and New York City. Other states and municipalities are likely to follow, particularly to fill the void left by the federal rescission.

Practical Takeaways for Employers and Counsel

The EEOC’s vote is significant, but it is a proposed rule, not a final one. Despite the commission’s vote, the prudent course for employers is not to dismantle their reporting infrastructure. Several considerations warrant attention:

1. Continue preparing to file EEO-1 reports for 2026. Until a final rule is published, the current obligation remains legally binding, and the rulemaking process could face litigation that delays or reverses the outcome.
2. Audit state-level obligations immediately. Employers operating in California, Illinois, Massachusetts, Minnesota, or New York City face independent reporting mandates that are unaffected by the federal rescission and may exceed the scope of the EEO-1, particularly with respect to pay data.
3. Maintain internal demographic recordkeeping. Title VII still requires employers to make and keep records relevant to any discrimination investigation, and the EEOC retains authority to request workforce data in the course of enforcement actions. Employers that abandon internal data collection entirely do so at their own risk.
4. Recognize that this decision could be reversed. Commissioner Kotagal expressly warned that a future Commission could reinstitute EEO-1 reporting. Employers should preserve the systems and processes that enable compliance rather than treating this as a permanent change.